City offering loans to first-time homeowners

Santa Clarita residents who want to purchase their first homes but need some help are encouraged to apply for the FirstHome program, which offers a low-interest and deferred-payment second mortgage to low- and moderate-income families.

The FirstHome loan program allows residents to use the funds from the loan as a down payment within the city of Santa Clarita's boundaries, according to city officials.

Payments are deferred until the home is sold, changes title, ceases to be the person's primary residence or after 30 years, said Erin Lay, housing program administrator for the city of Santa Clarita.

In order to qualify, residents have to meet income guidelines, which include a maximum of $67,450 for a four-person household and varies based on how many people live in the home, Lay said.

Since the program started in Santa Clarita in 2002, 15 families have been able to purchase their own homes, Lay said. Two of the families have paid off their loans after they bought a new home.

The city currently has about $700,000 in the funds for first-time home buyers, which will probably allow about four families to receive loans, Lay said.

"The costs of living in Santa Clarita are so high that our loans are a little higher than other cities because that's what it takes to get people into homes," Lay said.

About 300 to 400 people typically come to informational meetings held about the loans, but in the end, usually only about 10 to 20 people are actually eligible, Lay said.

Residents have to be eligible for a first mortgage and have a high enough income to pay for their mortgage and other debts in addition to meeting the income criteria.

"There is quite a lengthy winnowing process," Lay said.

Eligible residents will be entered into a lottery for the loans, with priority given to those who have lived or worked in city limits for at least six months. Residents will probably receive the loans early next year.

The loans are administered through the California Department of Housing and Community Development, although the funds come from the U.S. Department of Housing and Urban Development, Lay said.

Residents who are interested in the loans are asked to sign up at Santa-Clarita.com. Informational meetings will be held this summer.